Luxembourg: Works funds to become mandatory as of 1 August 2023

Applicable for all condominiums, whether residential buildings, buildings for professional use or mixed buildings
14 Jul 2023    1 minute read
Works Fund Renovation Works Thermal Envelope Improvement Existing and New Building Financing of the Renovation Works Mandatory Annual Contribution Co-Ownership Condominiums Sustainable Real Estate

In brief

The law of 30 June 2022 (“Law”) amending the amended law of 16 May 1975 on the status of the co-ownership of constructed buildings for the purposes of introducing a works fund entered into force on 1 October 2022. 

The Law introduced a mandatory obligation, which will become effective on 1 August 2023, requiring co-owners to create a works fund to anticipate the renovation works of buildings (existing and new buildings). 

The renovation works that fall within the scope of the Law include the following types of works:

  • Energy renovation works, improving the thermal envelope of the building 
  • Building infrastructure work in preparation for the fitting of technical ducts in the common areas of the building, and/or installation of energy production and storage facilities that use renewable energy sources in the common areas of the building.

Contents

Co-owners must make a mandatory annual contribution to the works fund in order to build the necessary financial reserves to cover the costs of the renovation works. 

The renovation works will be decided by a majority vote of all the co-owners at the general meeting whereby the amount of the annual contribution will be decided by a simple-majority ruling of the general meeting of co-owners (i.e., the majority of members present or represented at the general meeting).

The contribution cannot be lower than the minimum fixed amount per square meter (m2) set by the Law based on the energy classes of the buildings, prorated to the units held in the co-ownership by the co-owners:

  • Classes A+, A, B and C: The minimum contribution is set at EUR 3,00/m2.
  • Classes D and E: The minimum contribution is set at EUR 5,00/m2.
  • Classes F, G, H and I or if the energy performance certificate is either invalid or nonexistent: The minimum contribution is set at EUR 6,00/m2.

The assets of the works fund are not part of the invested capital. Only the amounts actually invested in works eligible for this purpose will be part of the invested capital.

The contribution is, in principle, savings in the name of the co-ownership. Only the general meeting can decide if and for what purpose this money will be used. A co-owner cannot be refunded their contribution to the works fund upon the sale of the units they held in the co-ownership.

For further information on what these developments mean for you or your organization, please get in touch with your usual Baker McKenzie contact.

Contact Information
Jean-François Trapp
Partner
Luxembourg
Read my Bio
jean-francois.trapp@bakermckenzie.com
Jean-Francois Findling
Partner
Luxembourg
Read my Bio
jean-francois.findling@bakermckenzie.com

Copyright © 2025 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.